The Indian government has introduced a significant relief for property owners by amending the Finance Bill 2024. The new provision grants taxpayers the flexibility to choose between two methods for calculating Long-Term Capital Gains (LTCG) tax on property sales.
Previously, the proposed removal of indexation benefits for LTCG on property sales had sparked widespread concern among homeowners, as it would have substantially increased their tax liabilities. In response to the public outcry, the government has opted for a more balanced approach.
Effective for properties acquired before July 23, 2024, taxpayers can now either opt for a flat 12.5% LTCG tax without indexation benefits or the traditional 20% tax rate with indexation. This dual option offers taxpayers greater control over their tax obligations, enabling them to select the method that aligns best with their individual financial circumstances.
The real estate industry has warmly welcomed this move, as it is expected to inject renewed optimism into the market. By mitigating the tax burden on property sellers, the government has created a more conducive environment for property transactions. This, in turn, is anticipated to stimulate demand and drive overall growth in the real estate sector.
The decision to provide taxpayers with a choice is a testament to the government’s responsiveness to public sentiment and its commitment to fostering a healthy real estate market. It is hoped that this measure will not only benefit homeowners but also contribute to the overall economic prosperity of the country.
